Exam 15: Economic Policy

________ policy is a government policy intended to provide benefits to a large portion of the population.

The ________is the annual difference between revenues collected by the national government and its outlays.

When we drive our own cars, we pollute the air. Our benefit-driving the cars-causes others to experience a cost-breathing polluted air and the possibility of related illness or discomfort. Polluted air is an example of a/an ________.

Keynesian economics ________.

When people and companies cannot borrow or earn enough money to make economic transactions that match the level of productivity, what is this called?

What is an externality? What are two examples of externalities? Why is public policy making often concerned with externalities? How might policy makers encourage activities with positive externalities and discourage activities with negative externalities?

Which policy is most consistent with a laissez-faire economic philosophy?

Consumption-based taxes, such as sales taxes, are generally considered to be ________ since lower income citizens are most heavily burdened by these taxes.

For the government, regulations are ________ compared to programs like Social Security, Medicare, or national defense.

What is the principal goal of the Social Security program?

In general, a/an ________ is most threatening to public goods.

By requiring banks to keep more money in their vaults, the Federal Reserve Board can effectively pull money out of the economy, thereby slowing ________. Conversely, by loosening reserve requirements, the Federal Reserve Board can pump more money into the economy, which usually leads to ________ interest rates and ________ access to loans.

In the absence of environmental laws, many people will act in their own self-interests; they will overuse natural resources and abuse the environment. If many individuals and businesses act this way, we will have a degraded environment and depleted resources. This poses a ________ for people who wish to enjoy the goods provided by nature.

National defense, which provides security against foreign invasion to all Americans living within the country's borders, is an example of a ________ policy.

Confidence in the dollar stems from the fact that the United States has never ________ on its bonds or experienced a serious threat to its ________ system since the mid-nineteenth century.

________ policy is a government policy that provides benefits to a particular group or class of citizens and is paid for by another group or class of citizens.

The Social Security system, which taxes workers to pay cash benefits to retirees and those who cannot work due to disabilities, is an example of a ________ policy.

________ is an economic philosophy that advocates public ownership and control of capital through government.

Workers at the Amalgamated Widget Corporation's factory use a press to turn sheets of aluminum into widgets. Which element of production at the factory is capital?

Because it has a history for running the economy in a ________ fashion, the reputation of the Fed is generally ________.